2023 Global
Ecommerce
Payments
And Fraud
ReportLimitation of liability
The information, recommendations or “best practices” contained herein are provided “AS IS”
and intended for informational purposes only and should not be relied upon for business,
operational, marketing, financial, legal, technical, tax or other advice. When implementing
any new strategy or practice, you should consult with your legal counsel to determine whatlaws and regulations may apply to your specific circumstances. The actual costs, savingsand benefits of any recommendations, programs or “best practices” may vary based upon
your specific business needs and program requirements.
By their nature, recommendations are not guarantees of future performance or results andare subject to risks, uncertainties and assumptions that are difficult to predict or quantify.
Assumptions were made by us in light of our experience and our perceptions of historical
trends, current conditions and expected future developments and other factors that we
believe are appropriate under the circumstance. Recommendations are subject to risks anduncertainties, which may cause actual and future results and trends to differ materially fromthe assumptions or recommendations.
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Report contents

03

Overview

04

Survey Firmographics

05

Executive Summary

08

Section 1: Payment Acceptance

12

Section 2: Payment Management

15

Section 3: Business Impact of Fraud

20

Section 4: Fraud Attacks & Challenges

26

Section 5: Fraud Prevention

30

Conclusion

31

About The Authors

32

Appendix 1 – Conversion and Acceptance Rates
By Payment Method

33

Appendix 2 - Questions Asked In The Survey

2023 Global Ecommerce Payments And Fraud Report3Overview
The Merchant Risk Council (MRC), Cybersource, and Verifi are pleased to present the resultsof the 2023 Global Ecommerce Payments & Fraud Survey, an educational report designed toconvey transparent and unbiased research. This report is based on a global survey of morethan 1,000 MRC and non-MRC merchants who were asked about their ecommerce payments
and fraud management practices. The survey sample includes a diverse mix of small
businesses (SMBs), mid-market and enterprise merchants, representing organizations based
throughout the North American, European, Asia-Pacific (APAC) and Latin American (LATAM)
regions. This research was conducted in November and December of 2022.
These survey results delve into today’s rapidly changing payments landscape to illuminate
the range of different payment acceptance, management and partnership practices
merchants are deploying, as well as the reasons why they are adopting these payment
strategies and tactics in the current commercial environment. In addition, this research
provides the MRC merchant community with the latest industry fraud data and fraud
management methods used by their peers, along with a robust set of performancebenchmarks that members can use to help optimize their fraud management andprevention practices.
The MRC extends its thanks to all participating merchants for taking the time to complete theonline survey, to Cybersource and Verifi for managing the research, and to B2B International for
directing the program and analyzing the data.

2023 Global Ecommerce Payments And Fraud Report4Survey firmographics
The survey was fielded in November and December of 2022. A total of 1,072 merchants
involved in ecommerce fraud and payment management (including 57 MRC member
companies) participated in the research. The sample includes merchants based in four major
geographic regions, with broad representation across size / revenue tiers, sales channels andcategories. The breakdown of the merchant sample across key firmographics is shown in the
figures below.
RegionCompany size

(annual eCommerce revenue)

25%
36%

21%

41%
17%

42%

17%
North America

EuropeSMB ($50k to <$5mn)

APAC

LATAM

Enterprise ($50mn+)

Industry vertical

52%

Figure 1

Mid-Market ($5mn
to <$50mn)
Figure 2

32%

8%

8%

Physical Goods& RetailTravel & Tourism

Digital Goods& Entertainment

Other Products & Services
Figure 3

The global sample distribution by region and size segment was kept consistent, year to year.
Some results may be driven by differences in the merchant populations surveyed in eachregion. Among the MRC members in the survey sample, two-thirds (67%) are based in North
America, with the remainder largely based in Europe (29%). 9 out of 10 MRC merchants in thesurvey are large enterprises, generating over $50mn in annual ecommerce revenue.

2023 Global Ecommerce Payments And Fraud Report

5

Executive summary
The key findings from the 2023 Payments & Fraud survey are organized into five focus
areas, or sections, in this report. Each section addresses a central question integral tounderstanding the state of ecommerce payments and fraud from the merchant perspective.
The first two sections focus on insights pertaining to ecommerce payments, while the last
three delve into topics related to ecommerce fraud.
These five focus areas, along with the key, high-level findings in each, are summarized below:

1. Payment Acceptance – How are merchants 		
being paid?
•

Bank transfers, digital wallets and cards continue to be the most widely accepted
payment methods among ecommerce merchants. Roughly 90% of merchants takesome measures to encourage customers to pay via certain, preferred methods,
primarily to minimize fraud risks and maximize how quickly funds become available.

•

Merchants are increasingly implementing buy-now-pay-later (or “BNPL”) payment
methods, with over one-third (36%) now offering customers this option. Acceptanceof card payments also increased globally over the past year. BNPL payments, crypto
payments and local digital payments (such as PIX and Alipay) stand out as thefastest-growing methods, with most who accept these having implemented themthis year.

••

Improving the customer experience is the top reason merchants add new payment
methods, but reaching new customer segments or markets is an important driver,too. Similar motivations are driving merchants’ increased usage of third-party
marketplaces, with 8 in 10 transacting via the likes of Amazon, eBay and similarmarketplace partners.

•

Merchants continue to leverage multiple payment processors and acquiring banks tosupport omnichannel payments, although small merchants use significantly fewer ofthese partners than mid-market and enterprise businesses. Maximizing operational
flexibility, geographic coverage, and payment authorizations top the list of merchantmotivations for utilizing multiple acquirers.

2. Payment Management – How are merchants
optimizing experiences & platforms?
•

To keep up with fast-changing shopping habits and payment preferences, merchants
continue to adopt and experiment with multiple new retail approaches and customer
experiences. Over the past year, BNPL and subscription / recurring purchases saw thelargest increases in usage, with over one-third of global merchants now offering these
options, compared to roughly one-quarter in 2021.
2023 Global Ecommerce Payments And Fraud Report

6

6

•

When it comes to new customer payment experiences, merchant usage of chatbots
and customer service AI programs, as well as connected devices, increased
substantially this year. In keeping with trends from previous years, enterprises andAPAC-based merchants over-index significantly when it comes to embracing these
new approaches and experiences, while adoption skews much lower among SMBs
and MRC members.

•

Merchants now employ an average of two to three different approaches or techniquesdesigned to optimize payment authorization. In particular, usage of machine learning
to fine-tune fraud management, as well as intelligent payment routing, have seen
increased adoption over the past year, with around 4 in 10 now utilizing each ofthese approaches.

••

As merchants utilize a larger array of payment methods, commerce partners and newretail approaches to serve customers, they are also tracking a wider range of payment
KPIs. The share who track payment success rate, revenue and cost of payments all
increased significantly over the past year, as did the percentage who keep a close eyeon refund rates. On average, merchants now cite over four different payment KPIs as“extremely important” for their organization (up significantly versus last year).

3. Business Impacts Of Fraud – What are the 		effects of fraud on merchant businesses?
•

Following a turbulent year in which fraud KPIs increased across the board, this year
saw encouraging improvement in several key fraud management metrics, such as theshare of ecommerce revenue lost to fraud, domestic order rejection and fraud rates,
and the share of ecommerce orders that led to fraud-related chargebacks. Decreased
fraud metrics were particularly evident in North America, where spending on fraud
management rose markedly last year. This year, anti-fraud spending rose significantlyin APAC and Latin America, as well as among small businesses, suggesting that thesesegments may hope to see improvement in their fraud metrics in the coming year.

•

On the subject of manual order review, merchants’ sentiments and future strategies
have remained consistent over time, with around 6 in 10 seeking to reduce or eliminate
this aspect of fraud management. Size of business is an important factor here, as
SMBs are apt to try to reduce or eliminate manual review, while enterprises are likely toretain it.
This year, APAC and LATAM-based merchants also stood out 			as the only segments reporting significant increases in the percentage 		of manually screened orders that they subsequently decline.

•

Roughly 85% of merchants have started implementing Strong Customer
Authentication (SCA) to comply with the EU’s PSD2 regulations, but roughly half (49%)
have yet to complete this process. Merchants in Europe & APAC, as well as large
enterprises, are taking the lead in this area. As merchants have adjusted to PSD2/
SCA in recent years, there has been a sharp increase in the share who say it has addedcomplexity to how they manage compliance (versus how they manage fraud andpayments).
New questions added to this year’s survey show recurring transaction, 		secure corporate payment (SCP) and transaction risk analysis (TRA) are 		
the top three SCA exemptions likely to be used most widely by merchants,
moving forward.

2023 Global Ecommerce Payments And Fraud Report74. Fraud Attacks & Challenges – Where are 		merchants most vulnerable?
•

Phishing / pharming / whaling attacks are still most prevalent. The incidence of
this attack, as well as re-shipping attacks, increased markedly in the past year. MRC
Members continue to cite a much larger and broader range of fraud attacks thannon-members (reporting 6, on average, versus just 3 for non-members). 		
First-party misuse, card testing & account takeover are particularly problematicfor MRC merchants.

•

Over one-third of merchants experience first-party misuse or “friendly fraud,” withenterprises in particular seeing a significant spike in this activity. Roughly 9 in 10
submit compelling evidence to resolve friendly fraud disputes, and 7 in 10 are awareof card brands’ recent updates to these policies. Those that are aware are generally
quite optimistic these updates will help combat this thorny issue.

•

Merchants cite increasing challenges in managing ecommerce fraud over the past few
years. Effectively using data and analytics to manage fraud has become a particularlypressing challenge and also a key focus area for improvement this year. Merchants
in APAC and Enterprises face a disproportionate number of fraud management
challenges, in contrast to those in North America and SMBs. MRC members struggle
more than non-members when it comes to fraud tool deficiencies & 			
resource constraints.

5. Fraud Prevention – How are merchants 			addressing the issue of ecommerce fraud?
•Continuing a trend from last year’s survey, merchants are more likely to prioritize
preventing fraud and chargebacks, versus improving CX or minimizing costs. But
merchants in Latin America are more evenly split on this question with equal sharesprioritizing fraud prevention versus CX improvement.

•

Merchants are utilizing an increasing array of fraud detection tools – five, on average– with over half using credit card and identity verification services. Enterprises use asignificantly larger arsenal of fraud detection tools, while SMBs use fewer tools than
average. MRC members use twice as many fraud detection tools as non-members, on
average, which is likely linked to MRC merchants’ much higher propensity to outsource
fraud tools. But MRC members are far less likely than non-members to use two-factor
phone authentication and credit history checks.

•

The most widely used tools are generally rated the most effective, but more merchantsshould consider using biometric indicators, individualized fraud scoring models, &multi-merchant purchase velocity models, given these tools’ low usage and 		high effectiveness.

Altogether, the insights and findings from this year’s study indicate that merchants are striking an increasingly successful balance
between leveraging technological tools and tactics and applying human knowledge and expertise to optimize payment & fraud
management. This strategic challenge is evident in many of the trends and topics discussed throughout the report, making it oneof the central themes emerging from our research this year.

2023 Global Ecommerce Payments And Fraud Report8

1. Payment
Acceptance 		and Partners
In the first two sections of this report, the focus is on ecommerce payments. Specifically, these sections examine how merchants arebeing paid by consumers and how they are managing and optimizing payment processes and operations.
This section delves into the question of how merchants are being paid – i.e., which payment methods they accept, how many processing
and finance partners they use to support payment acceptance, and how their acceptance strategies and partnerships vary by region,size, and MRC membership status.

Direct Debit, Digital Payments And Cards Still Most Popular Payment Methods Accepted, With Buy
Now Pay Later (BNPL) On The Rise
Globally, ecommerce merchants currently accept payments via four primary methods: digital wallets, direct debit transfers, traditionalcards and mCommerce mobile apps (such as PayPal mobile or Amazon one-click). Cash is also accepted by nearly half of merchants,
while gift cards and vouchers, third-party payments, and buy-now-pay-later (BNPL) payments are each accepted by around 3 in 10.
Over the past 12 months, merchants have been most likely to add digital wallets, BNPL and mCommerce payments to their acceptance
portfolio (see Figure 4). Localized digital payment methods, like PIX and Alipay, as well as cryptocurrency payments, also seem to be on
the rise, as most merchants who accept these began doing so over the past 12 months.
Figure 4: Payment Methods Currently Accepted & Added In Past 12 Months (2023)

Payment Methods Currently Accepted & Added In The Past 12 Months
67%

(+9%)

66%

Avg. Number Currently Accepted = 4.6

66%
Avg. Number Added In P12M = 2.2
(-7%)

50%

45%
(+6%)

37%

36%

16%

Bank
Digitaltransfers /wallets /direct debit eWallets (e.g.
Apple Pay)

Cards

Currently Accepted

30%
24%

25%

23%

19%

33%

15%

14%

mCommerce
mobile payments(e.g. Amazon
one-click)

Cash

Added in P12M

Buy Now
Pay Later

Gift Cards /vouchers

15%

Cash ondelivery

16%

19%
17%

Other local
Cryptodigitalcurrency
payment(e.g. PIX, Alipay)= Sig. Higher vs. 2022

2023 Global Ecommerce Payments And Fraud Report

14%
9%

8% 8%

Other
alternative
payments(e.g SEPA)

Network
tokens= Sig. Lower vs. 2022

9

In addition to the year-over-year trends illustrated in Figure 4, our 2023 data also reveal notable differences in the types and numbersof payment methods accepted by merchants in different regions and size segments. Although cards, bank transfers / direct debit
and digital wallet payments are the top three most widely accepted methods in all four regions, there are significant differences in
acceptance of other forms of payment across different geographic markets. For instance, North American merchants are nearly twice as
likely as those in Europe to accept cryptocurrency payments (23% vs. 13%). Latin American merchants skew higher than those elsewhereon acceptance of both card payments (at 79%) and local digital payments, like PIX (accepted by 46%). And merchants in APAC overindex on acceptance of digital wallet payments (76%), mCommerce mobile payments (59%), and BNPL (54%).
When it comes to the number or variety of different payment methods currently accepted, merchants in APAC and enterprise merchants
tend to accept more payment methods than average, while merchants in North America and SMBs accept fewer than average (seeFigure 5). Looking at the numbers of new acceptance methods added over the past year, it’s clear that APAC merchants are embracing
a broader approach than those in other regions – especially Europe – with the former group adding almost twice as many new payment
methods as the latter, on average (see Figure 5).
Figure 5: Average Numbers Of Payment Methods Currently Accepted And Added In Past 12 Months (2023)

By Region (2023)

Average Numbers of Payment Methods
Accepted & Added In Past 12 Months
Base

By Ecommerce Revenue (2023)

By MRC Status (2023)

OverallNorth
America

EuropeAPAC

LAT AMSMB

MidMarket

Enterprise

NonMember

MRC
Member

1,072

440

269

180

177

391

226

455

1,015

57

Average No. Of Payment Methods Accepted

4.6

4.3

4.4

5.3

4.7

4.2

4.5

5.0

4.6

5.1

Average No. Added In Past 12 Months

2.2

2.1

1.7

3.2

2.0

1.7

2.2

2.5

2.2

0.9

= Sig. Higher= Sig. Lower

Also, MRC merchants take a notably different approach to payment acceptance than non-members. MRC merchants are significantly
more likely to accept cards, digital wallets, gift cards or vouchers and other alternative payments, such as SEPA and Giropay (see Figure6). MRC members also lead adoption of BNPL, with 47% accepting this method, compared to 35% among non-members. But nonmembers seem to be catching on quickly with BNPL, as this year’s survey shows a significant rise in the share who accept it, compared
to last year.
Figure 6: Differences In Payment Acceptance Among MRC Members vs. Non-Members

By MRC Status (2023)

Share of Merchants Currently
Accepting Each Payment Method

Overall

Non-Member

MRC Member

1,072

1,015

57

Bank transfers / direct debit

67%

68%

49%

Digital wallets / eWallets

66%

66%

82%

Cards

66%

64%

96%

mCommerce mobile payments

50%

51%

32%

Cash

45%

46%

30%

Buy Now Pay Later

36%

35%

47%

Gift Cards / vouchers

33%

32%

56%

Cash on delivery

30%

31%

11%

Other local digital payment method

24%

24%

37%

Cryptocurrency

19%

19%

11%

Other alternative payments (SEPA, Giropay, etc.)

13%

12%

49%

Network Tokens

8%

8%

7%

Base

= Sig. Higher

2023 Global Ecommerce Payments And Fraud Report= Sig. Lower

10

Another aspect of payment acceptance in which MRC merchants diverge from non-members is when it comes to encouraging payments
via certain, preferred methods. While 9 out of 10 merchants globally encourage payments via preferred methods, the same is true of onlyaround half of MRC members (see Figure 7). The vast majority of merchants who do encourage payments via preferred methods mainly
do so to lower fraud risk, expedite availability of funds, and lower payment processing costs.
Typical approaches used by merchants to encourage such payments include promoting and incentivizing the use of preferred methods(for instance, through discounts or reward programs), offering preferred methods prior to the main payment selection page, and preselecting preferred methods as default payment options for customers. (see Figure 7).

Figure 7: Approaches And Reasons For Encouraging Ecommerce Payments Via Preferred Methods

Approaches Used To Encourage Payments Via Preferred Methods

Main Reason For Encouraging Use Of Preferred Methods
2023 (n=952)

2023 (n=1,072)
Promote preferred payment methods

Lower payment fraud risk

46%

28%

Offer preferred payment methods prior to
payment selection page

41%

Faster availability of funds

23%

Provide incentives for using preferredpayment methods

41%

Lower payment processing costs

21%

Pre-select preferred payment method

39%

Higher conversion rate

Include surcharge / fee for non-preferred
methods
None of the above (we do not encouragecustomers to use any speciﬁc methods)

Preferred / exclusive partnerarrangement

25%

17%

Mid-Market (35%)

Enterprises (22%)

11%

MRC Members
(47%)

11%

= Sig. Higher vs. other segments= Sig. Lower vs. other segments

Third-Party Marketplaces Remain Key Partners, Especially For Large & Midsize Merchants
Over three-quarters (77%) of merchants sell through third-party marketplaces, like Amazon and eBay and Alibaba (see Figure 8). Midsize
and enterprise merchants over-index on using marketplaces to support online business, in contrast to SMBs. Non-MRC members
are also far more likely to sell through marketplaces than MRC members. Gaining access to the large numbers of loyal customers that
use these marketplaces is the primary reason merchants utilize them, although other motivations are also at play, like offering good
customer experiences and being able to compete with other merchants on a level (and global) playing field (see Figure 8).

Figure 8: Usage Of Top Third-Party Marketplaces And Reasons For Using Them

Top 5 Marketplaces used (% merchants using each marketplace to sell to customers)

Enterprises (2.9)

Avg Number Marketplace Used = 2.5

62%SMB (2.0)2023 (n=1,072)
38%

27%

27%

MRC Member (1.4)

19%

23%
Do Not Sell On Any
Marketplaces

Reasons for Using Third-Party Marketplaces

60%

To gain access to larger
number of loyal customers

52%

To offer a good
customer experience

Enterprises (45%)
SMB (29%)

43%

41%

38%

To compete on a levelplaying ﬁeld with othermerchants

To engage in eCommerce
without needing tobuild a website

To conduct commerce
to is fully location
independent= Sig. Higher vs. other segments

33%

To beneﬁt fromlow startup costs= Sig. Lower vs. other segments

2023 Global Ecommerce Payments And Fraud Report

11

Payment Acceptance Supported By Multiple Processor and Acquirer Partners
While online marketplaces may occupy the gray area between cooperation and competition with ecommerce merchants, there areother third-party partners – specifically, payment processors and acquiring banks – that are far more essential to supporting payment
acceptance offerings.
On average, merchants rely on roughly four payment processor or gateway connections and three acquiring banks to support
omnichannel payments, although these figures skew a bit higher for APAC and LATAM-based merchants and lower for those in North
America. Enterprise merchants also tend to use more of these partners than SMBs (see Figure 9).
Maximizing flexibility, geographic coverage, and payment authorizations represent the main reasons why merchants utilize multiple
acquirers. APAC-based merchants and enterprises tend to cite additional reasons, as well – for instance, eliminating interchange feesin certain countries. This partly explains why these segments tend to use more of these partners than merchants based in other regions
and size segments.

Figure 9: Usage Of Payment Processors & Acquiring Banks To Support Payment Acceptance

Number Of Payment Partners Used
(Trimmed averages shown for both)Number Of Payment Gateway / Processor
Number Of Payment Partners Used
Connections
Currently
Supported(Trimmed averages
shown
for both)

By Region (2023)

Overall Overall
2022
2023

4.1

3.9

3.2
4.1

3.4
3.9

EuropeAPAC

By Region (2023)

3.5

3.8

4.5

4.7

SMB

LAT AM

SMB

3.2
3.8

4.1
4.5

3.9
4.7

2.7
3.2

Reasons
Using Multiple
Acquiring
n=806 merchants using 2 or more acquiring banks)
Number For
Of MerchantAcquiring
BanksBanks (among
3.2
3.4
2.9
3.2
4.1
3.9
Currently58%
Used

2.7

44%

2.9
3.5

42%

44%

APAC (55%)
Enterprise (50%)

42%

4.2

4.3

MidMarket

Enterprise

3.4
4.2

3.9
4.3

3.4

3.9

39%

33%

39%

39%

33%
To eliminate

APAC (54%)
Enterprise (50%)

By MRC Status (2023)

Enterprise

39%

Reasons For Using Multiple Acquiring Banks (among n=806 merchants using 2 or more acquiring banks)

58%

MidMarket

NonMember

By Ecommerce Revenue (2023)

3.2

APAC

Connections Currently Supported

North
America

By Ecommerce Revenue (2023)

LAT AM

EuropeNumber Of Merchant Acquiring Banks
Currently
Number OfUsed
Payment Gateway / Processor

Overall Overall
2022
2023

North
America

MRC
MemberBy MRC Status (2023)

4.0

3.3

NonMember

MRC
Member

3.4

2.9

3.4
4.0

2.9
3.3

32%
APAC (50%)
Enterprise (41%)

32%
Because they
are integral
interchange fees incomponents of existing /certain countriesAPAC (50%) broader relationships

For overall
flexibility

To improve or
To improve or
To gain access tomaximizemaximize
distinctive technologies
APAC
(55%)
APAC
(54%)
geographic
authorizations
or capabilities
Enterprise (50%)
coverage Enterprise (50%)

To improve or
maximize uptime

For overall
flexibility

To improve or
maximizegeographic
coverage

improve
To eliminate
theyaresegments
integral=To
Sig.
Higherorvs. other segments= Sig.Because
Lower vs.
other
maximize uptime
interchange fees incomponents of existing /certain countries
broader relationships

To improve or
maximizeauthorizations

To gain access todistinctive technologies
or capabilities

Enterprise (41%)= Sig. Higher vs. other segments

2023 Global Ecommerce Payments And Fraud Report= Sig. Lower vs. other segments

12

2. Payment
Management
In this section, we examine what merchants are doing to improve and innovate customer payment experiences and to optimize
internal payment management processes and operations. Notable payment management trends uncovered by our survey this year
include an uptick in merchants offering Buy Now Pay Later (BNPL) and subscription payment options, more integration of chatbots,
AI and machine learning to support customer-facing and internal payment operations, and a heightened focus on
tracking several important payment management metrics, or KPIs.

More Merchants Implementing Novel Retail Approaches And Customer Experiences
This year’s results show increasing usage of several novel retail approaches and customer experiences, suggesting that moremerchants may be moving past the experimentation stage with these approaches and aiming for full adoption and integration over the
coming years. Overall, merchants are using an average of 3.6 new retail approaches this year (up from 3.4 last year) and an average of
2.8 new customer experiences (up from 2.6 last year). Detailed, year-over-year data for both of these questions is displayed in 		
Figure 10, below.

Figure 10: Usage Of New Retail Approaches & Customer Experiences – 2023 vs. 2022

Usage of Retail Approaches
Avg. Number Of Retail Approaches Used: 3.62023(n=1,072)

Phone orders

35%

38%
38%

Buy online, ship to store (BOSS)

34%

Installments / retail ﬁnancing (buy now, pay later)

28%

36%

Reserve online, purchase in store

35%
37%

Buy online, pickup in store (BOPIS / ISPU)

35%
37%

Subscription/recurring purchase

35%

25%

Buy online, return in store (BORIS)

30%
28%

Browse in-store on mobile, buy online (BIMBO)

30%
30%

Buy in store, pickup in other store

24%

28%

27%
29%

Research online, purchase offline (ROPO)
20%

Buy offline, return online
None of the above2022(n=1,060)

7%8%2023 Global Ecommerce Payments And Fraud Report24%= Sig. Higher vs. 2022

= Sig. Lower vs. 202213

Figure 10: Usage Of New Retail Approaches & Customer Experiences – 2023 vs. 2022

Customer Experiences Offered
Avg. Number Of Customer Experiences Offered: 2.8

2023
Chat bots / customer service AI

34%

2022

(n=1,060)

40%

Connected devices

34%
29%
26%

Curbside / locker pickup
Biometrics

28%
25%

Face-to-pay

26%
29%

Voice commerce

25%
25%

Self-service kiosks

24%
24%

Augmented reality (AR)

21%
23%

Grab & go

19%
18%

Pop-up shops

18%
19%

None of the above

40%(n=1,072)14%
17%= Sig. Higher vs. 2022

= Sig. Lower vs. 2022

In terms of new retail approaches, there was around a 10% uptick in the share of merchants offering Buy Now, Pay Later options(also known as installments or retail financing), as well as a similar increase in the share offering subscription or recurring purchaseprograms. Over one-third of merchants globally are leveraging these two approaches. As with many other aspects of payment andfraud management, midsize and enterprise merchants are leading the way in adopting and integrating these into theirselling strategies.
When it comes to new customer experiences, 40% of merchants are now leveraging chatbots or customer service AI programs, as wellas those utilizing connected devices to provide customers with more seamless and streamlined omnichannel experiences. Examples ofchatbot and AI programs introduced by U.S. merchants include Domino’s Pizza’s chatbot called Dom, which makes it easy for customers
to place orders on the go via the Facebook Messenger app and Sephora’s Virtual Artist – a mobile application that allows customers to“try on makeup instantly” using only a smartphone. Connected devices also enable more seamless payment transactions (e.g., via tapto-pay solutions embedded on smartphones), as well as physically touchless transactions – an increasingly critical benefit, following
the global COVID-19 pandemic. With such a sizable share of merchants leveraging these two tactics, their global usage rate now wellexceeds all other new experiences tested in our survey – e.g., curbside pickup, biometric payments and pop-up shops.

Increasing Usage Of Machine Intelligence To Optimize Internal Payment Processes
Merchants tend to employ two to three different approaches or techniques designed to optimize payment authorization, internally.
In particular, usage of machine learning to fine-tune fraud management, as well as intelligent payment routing, have seen increased
adoption over the past year, with around 4 in 10 now utilizing each of these approaches (see Figure 11). Merchants in Asia, as well asenterprise and mid-market merchants, are using more of these approaches than average, in contrast to small businesses. While fraud
management has historically been seen as a separate function to payment processing, sophisticated fraud management is also seen
today as a means of optimizing payment authorization through its emphasis on lowering of false positives and even influencing issuer
acceptance by achieving lower merchant fraud rates.
Also shown in Figure 11 is the share of merchants saying they use third-party data to support each of these authorization-boosting
approaches. On this question, we saw a small but consistent trend of retrenchment among merchants, with slightly fewer utilizing thirdparty data this year, compared to last year, to support authorization-related approaches.

2023 Global Ecommerce Payments And Fraud Report

14Figure 11: Usage Of Payment Authorization Approaches & Percent Using Third-Party Data With Each – 2023 vs. 2022

% Merchants Using Each Approach

2023

2022

APAC (3.3)
Enterprise (2.9) & Mid Market (2.6)

Avg Number Approaches Used = 2.4

41%
35%

39%

37% 35%35%

33% 32%31%

SMB (1.7)

36%

31% 32%

30%

29%

10%

Using machinelearning toﬁne-tune fraud
management

Intelligent
payment routing

Automated retries
for payments

Real-time
card-on-ﬁleupdates using
tokenization

3D Secure 2
usage to improve(issuer) approval
rate

Reducing failedtransactions withAccount Updater

Dynamic
currency
conversion

14%

None ofthe above% Using Third-Party Data With Each Approach (among all merchants using each)
64% 67%

Using machinelearning toﬁne-tune fraud
management

65%

72%

61% 66%

Intelligent
payment routing

62%

Automated retries
for payments

71%

Real-time
card-on-ﬁleupdates using
tokenization

58% 56%

3D Secure 2
usage to improve(issuer) approvalrate

66% 69%66% 70%

Reducing failedtransactions withAccount Updater

Dynamic
currency
conversion= Sig. Higher= Sig. Lower

Merchants Keeping A Closer Eye On Several Payment Metrics, Including Refund Rate
As merchants deploy new customer-facing and internal payment management approaches, they are also keeping a closer eye on a
range of important metrics, or KPIs. On average, merchants now rate 4.1 payment KPIs as extremely important to their organization –up significantly from an average of 3.7 last year. The shares of merchants who monitor success rate, revenue and cost of payments allrose significantly since 2022, as did the share who track refund rates (see Figure 12).
Here again, our data show larger merchants taking more advanced and comprehensive approaches to payment management,with enterprises tracking five of these payment KPIs, on average, while SMBs tend to keep tabs on just three or four.

Figure 12: Payment Management KPIs – 2023 vs. 2022

Top 3 KPIs
MRC Member (6.9)

50%
45%

Payment
success rate

Enterprise (4.8)

Avg Number Used 4.1

48%
41%

Revenue

45%
37%

Cost ofpayments(vs. 2022)

SMB (3.4)

34%

30%

Authorization
Rate

31%

29%

Authentication
rate

30%

24%

Refundrate

30% 28%29% 28%Loss rates –Orderchargeback & conversion
fraud rates
rate

2023
(n= 1,072)

28%

24%

Settlementtime

26% 26%Checkout
abandonment rate2022
(n=1,060)

22%22%

20%
17%

Averageticket size

CustomerRetry
NPS based performanceon shopping
experience= Sig. Higher

18% 18%= Sig. Lower

Additionally, our data indicates that MRC merchants are especially intent on measuring and monitoring their payment metrics; they track
an average of seven different KPIs tested in our survey – nearly twice as many as the average non-MRC merchant.

2023 Global Ecommerce Payments And Fraud Report15

3. Business
Impactsof Fraud
The last three sections of this report shift our focus from ecommerce payments to ecommerce fraud. In this section, we delve into
data around the costs of managing fraud and examine how fraud KPIs have changed over the past year to understand, at a high level,
whether merchants have been more or less successful in applying financial resources to thwart and mitigate the negative impacts ofecommerce fraud on their businesses. We also revisit the topics of manual order review and the implementation of Strong Customer
Authentication (SCA) to understand how merchants are thinking about and acting on these issues, now and in the near future.

Fraud-Related KPIs Exhibit Encouraging Declines, Especially On Domestic Orders
Following a turbulent year in which fraud KPIs increased across the board, merchants reported some improvement in fraud-related
KPIs over the past 12 months, especially in relation to domestic business. As evidenced by the data table in Figure 13, the percentage
of ecommerce revenue lost to fraud globally, order rejection and fraud rates on domestic orders, and the share of ecommerce ordersthat led to fraud-related chargebacks all declined significantly versus the prior year.
Decreased negative fraud metrics were particularly dramatic in North America, where we saw spending on fraud management increase
markedly last year. APAC-based merchants, midsize and enterprise merchants, and both MRC members and non-members also citedstatistically significant declines in various key metrics, in line with the general, positive trend this year of declines across the board.

Figure 13: Fraud Management KPIs – 2023 vs. 2022

Fraud Management KPIs
(2022 figures in blue)
Trimmed averages shown for all KPIs

By Region

By Revenue

By MRC Status

2022

2023

North
America% of eCommerce revenue lost to
payment fraud globally

3.6

2.9

2.4

3.1

2.9

4.6

2.7

3.3

2.8

3.2

0.3

% of eCommerce revenue lost to
payment fraud from domestic orders

3.4

3.0

2.4

3.3

3.0

3.9

2.8

3.2

2.9

3.2

0.2

Order rejection rate for domestic orders

3.4

2.7

2.4

2.7

3.2

3.3

2.1

2.9

3.1

2.8

1.8

Order rejection rate forinternational orders

6.0

5.3

4.4

5.3

6.0

6.1

4.1

5.3

5.8

5.5

2.9

2.6

2.2

2.9

2.5

3.5

2.3

3.1

2.6

2.8

0.3

3.4

3.0

2.5

3.2

2.6

3.8

2.7

3.1

3.0

3.2

0.3

3.1

2.6

2.2

2.7

2.8

3.7

2.4

2.8

2.8

2.8

0.2

% of domestic eCommerce ordersthat turned out to be fraudulent% of international eCommerce ordersthat turned out to be fraudulent% of eCommerce orders that led tochargebacks (due to fraud)

3.1

3.6
3.6
3.6
6.3
3.2
3.3
3.4

EuropeAPAC

LAT AM

3.0
2.8
2.8
5.1
2.7
3.0
2.3

4.3
3.3
2.9
5.3
2.9
3.7
2.9

4.2
3.6
4.4
7.0
3.4
4.0
3.8

SMB

MidMarket

Enterprise

NonMember

MRC
Member

2.9
3.0
2.8
5.3
2.6
3.0
2.6

4.1
3.8
3.9
6.7
3.7
3.8
3.7

= Sig. Decrease In Fraud KPI2023 Global Ecommerce Payments And Fraud Report

3.7
3.4
3.6
6.0
3.1
3.3
3.3

3.7
3.5
3.4
6.1
3.2
3.5
3.2

0.7
0.4
2.1
3.0
0.6
0.7
0.2

= Sig. Increase In Fraud KPI

16

Spending On Fraud Management Remains Relatively Consistent
Globally, merchants continue to spend about one-tenth of their annual ecommerce revenue to manage payment fraud – a figure thathas stayed quite consistent for three consecutive years in our study. We have also seen a notable decline in the share of merchants whotell us that they “don’t know” or “don’t track” this metric – from 30% in our 2021 study to 23% this year – suggesting that merchants are
keeping a closer eye on fraud management spending as time goes on (see Figure 14).

Figure 14: Spending To Manage Payment Fraud (Relative To Annual Ecommerce Revenue)% Of Annual Ecommerce Revenue Spent To Manage Payment Fraud
Trimmed medians shown for all cost estimates.
Overall

2023 - Key Breaks
Region:

10%

10%

11%

2021

2022

2023

30% don’tknow or don’t
track

25% don’tknow or don’t
track

23% don’tknow or don’t
track

10%

10%

15% (+6%)

19% (+8%)

North America

EuropeAPAC

LAT AM

Ecommerce
Revenue:

12% (+6%)
SMB

MRC
Membership:

10%

12%

Mid-Market

Enterprise

0.1%
MRC Members

12%
Non-MRC Members(Parentheses show noteworthy trends compared to 2022:
green text indicates an increase & red text indicates a decline)

From a geographic perspective, merchants in North America and Europe are spending about the same this year as they did last year to
manage payment fraud. By contrast, those in APAC and Latin America have markedly increased spending over the past year – by 6% for
the former and 8% for the latter. In fact, merchants in LAT AM are now spending nearly twice as much as the global average to manage
payment fraud (19% versus 11%).
Also noteworthy is the increased spending on fraud management among the smallest merchants in our study – SMBs that generate
between $50,000 and $5 million in annual ecommerce sales. These merchants essentially doubled their estimated fraud management
spending over the past year, from 6% to 12% of ecommerce revenue.
In last year’s study, we saw merchants in North America increase their fraud management spending dramatically, and that was followedby significant declines in the fraud KPIs they reported to us this year (see Figure 13). If a similar pattern holds true, merchants in APAC
and Latin America, as well as SMBs, should see positive effects from their increased spending in the form of improved fraud metrics over
the year to come.

Manual Order Review Still Important In Fraud Prevention, But Most Want To Reduce It
As illustrated by the data in Figure 15, over 60% of merchants plan to eliminate or reduce the amount of manual order review they
engage in as part of their fraud prevention efforts – a proportion that has remained consistent over our past three years of research.
Merchants based in APAC are significantly less likely to take this view, however, and instead far more likely than those in other regions
to say they will only conduct manual reviews for business-specific policies (e.g., when shipping to certain countries or handlingorders for certain products).

2023 Global Ecommerce Payments And Fraud Report17

Figure 15: Role Of Manual Review In Merchants’ Fraud Prevention Strategies (2023)

2023 - Overall

2023 - By Merchant Segment
Region:14%
Plan to eliminate it
63% plan toeliminateor reduce
manual review

49%

Will always have it,
but want to reduce it

North America

15%

47%

Europe

15%

54%

APAC

12%
15%

43%

6%

25%

29%

LAT AM

15%

57%

SMB

19%

48%

Mid-Market

13%

57%

16%
22%

13% 14%

Size:

Will only review forbusiness speciﬁc policies*

16%

Remain a core part ofthe strategy

21%Enterprise 9%

12%

21%

14% 16%

47%

20%

24%

Membership
MRC Members(*policies include the likes of 1 PS5 per
customer, only ship to certain countries, etc.)

Non-Members

24%

41%

13%

0%

50%

= Sig. Higher vs. others in 2023

35%
17%

20%

= Sig. Lower vs. others in 2023

Size of business also matters when it comes to future plans for manual review, as SMBs are more likely to say they plan to eliminate thisprocess entirely, while enterprises are significantly less likely to attempt this approach.
Just as merchants’ plans and expectations concerning manual review have remained relatively consistent over the past few years, so
too have their actions, in terms of carrying manual reviews out, in practice. After registering a slight decline last year in the share ofecommerce orders manually screened and subsequently declined, these figures ticked upward slightly in this year’s survey. Globally,
merchants now screen an average of 19% of all ecommerce orders manually, 15% of which they end up declining (see Figure 16). In
other words, merchants manually screen about one out of five online orders they receive, and out of all of the orders that they review,
they end up declining around one out of seven.

Figure 16: Screening & Declining Ecommerce Orders Using Manual Review% of eCommerce orders manually screened & subsequently declined% of manually reviewed orders that are subsequently declined
Region:20%
17% of reviewed
orders declined

18%

12% of reviewed
orders declined

19%

15% of reviewed
orders declined

15%

11%

North America

Europe

APAC
Size:

3%

3%

2%

2021

2022

2023

25% “Don’t Know” Or“Do Not Conduct
Manual Review”

24% “Don’t Know” Or“Do Not Conduct
Manual Review”

20% “Don’t Know” Or“Do Not Conduct
Manual Review”

19% (+7%)

17% (+5%)

LAT AM

14%

13%

16%

SMB

Mid-Market

Enterprise

21%
MRC Members

Membership

15%

Non-Members(Parentheses show noteworthy trends compared to 2022:
green text indicates an increase & red text indicates a decline)

Merchants in the Asia-Pacific and Latin America regions significantly increased the share of manually screened orders that they ended
up declining, compared to the previous year, which may partly explain why spending on fraud management also rose significantly formerchants in these two regions (see Figure 14).

2023 Global Ecommerce Payments And Fraud Report18

Notably, MRC members approach manual review quite differently than non-members. As shown in Figure 15, MRC members are far lesslikely to conduct reviews based on business-specific policies and instead more likely to say they either plan to eliminate reviews entirelyor to retain manual reviews indefinitely as a core part of their strategy. In addition, MRC members decline a greater percentage of theirmanually screened orders than non-members – 21% for the former, compared to 15% for the latter (see Figure 16). These data could
indicate that either MRC merchants are faced with a higher share of fraudulent orders than non-members or that they have different
tools, tactics or techniques in place for conducting manual review, which result in them declining a somewhat higher percentage of theorders they screen manually.
The differences in manual review metrics between MRC members and non-members, as well as large enterprise merchants and smaller
merchants more generally, may indicate that the latter segments are leading the way in figuring out how, where and when to best apply
technological solutions versus human expertise and labor to tackle the problem of manual review.

Implementation Of SCA Is Well Underway, But Most Have Yet To Complete The Process
Progress is well underway, in terms of merchants implementing Strong Customer Authentication (or SCA), which is required to comply
with the EU’s updated Payment Services Directive, or PSD2. But while 86% of merchants have started to implement SCA, only 45% saythey have done so fully – in other words, most still have work to do to complete the implementation process (see left side of Figure 17).

Figure 17: Merchant Implementation Of Strong Customer Authentication (SCA)

2023 - Overall

2023 – By Key Breaks

NET % Partially Or Fully Implemented:

We have fully
implemented SCA% Not Implemented At All

86%

Region:We have not yet
started to implement SCA

I am not familiar
enough to say= Sig. Higher vs. other Segments

Size:= Sig. Lower vs. other Segments

16%

4%

43% 48%

Membership% Fully Implemented

43% 52%

4%

Europe

53%
10%

APAC

MRC Members

38%

56%

3%

3%

Mid-Market

Enterprise56%
16% 7%

33%

LAT AM

50% 46%

41% 31%

SMB

41%

8%
6%

35% 45%

North America

45%

We are in the processof implementing SCA

10%% Partially Implemented

43% 44%
7%

Non-Members

Note: Percentages for “not familiar enough to say”
excluded from charts above.

As shown in the data on the right-hand side of Figure 17, Europe- and APAC-based merchants are leading the charge to implement
SCA from a geographic perspective, while enterprises and are farthest along among business in different size segments. 		
The majority of MRC members surveyed have fully implemented SCA, but there also seems to be a segment of MRC merchants who
are lagging behind, as 16% have not yet begun the process at all, compared to only 7% among non-MRC members.
For the past three years, we have asked merchants what impacts SCA implementation is having or will have on their business. Looking
at their responses to this question over time (as shown in the left side of Figure 18) reveals an interesting trend: As time has passed
and merchants have gotten further into the implementation process, the percentages who say SCA implementation has increased thecomplexity of managing payments and managing fraud have significantly declined. Conversely, the share of merchants who say thisprocess has increased the complexity of how they manage compliance has sharply risen. Currently, merchants seem to be evenly split
on all three of these dimensions, with roughly half saying implementation has increased complexity in each of the three areas.

2023 Global Ecommerce Payments And Fraud Report

19Figure 18: Business Impacts Of SCA Implementation (2021-2023) & Planned Usage Of SCA Exemptions (2023)

Overall % Citing Each Type Of Impact (2021-2023)

56%

61%

54%

56% 54%49%

49%% Planning To Use Each Type of Exemption (2023)
Recurring transaction

41%

Secure Corporate Payment (SCP) exemption

40%

Transaction Risk Analysis (TRA) exemption

39%

Trusted merchant exemption

37%

Merchant Initiated Transaction (MIT)

34%

34%
23%

Low value exemption

28%

Delegated authentication exemption

26%
23%

Mail order telephone order
One leg out
Increasedcomplexity inmanaging payments

2022

Increasedcomplexity inmanaging fraud2022

Increasedcomplexity inmanaging compliance2023= Sig. Lower

10%

I am not familiar enough to say

6%

None of the above

6%

Enterprises (3.4)

Avg Number Selected = 2.9
SMB (2.2)
MRC Member (2.2)= Sig. Higher

This year, we added one additional question on the subject of SCA to understand what types of SCA exemptions merchants plan to use
in the future. This data is shown on the right side of Figure 18. Overall, merchants cited an average of around three SCA exemptions
they plan to use, with recurring transactions, Secure Corporate Payment, and Transaction Risk Analysis exemptions being selected byaround 4 in 10 merchants, respectively. Trusted merchant and Merchant Initiated Transaction exemptions were also popular, with over
one-third planning to use each of those, as well.
Not surprisingly, enterprise merchants over-index on the number of exemptions they will likely make use of, while the opposite is true
for small businesses. MRC Members also under-index when it how many exemptions they plan to use, averaging only 2.2, versus 2.9
among non-members (see right side of Figure 18). In fact, MRC members are more likely than most to say they have no plans to use any
SCA exemptions, given that 14% of them selected this response, in contrast to just 6% among non-members.

2023 Global Ecommerce Payments And Fraud Report204. Fraud Attacks& Challenges
This section starts by examining the most prevalent types of fraud ecommerce merchants experience and how their incidence fluctuates
over time and across different segments of the merchant population. First-party misuse, or “friendly fraud,” is one particular focus
in this area of insights. Next, we move on to review merchants’ top fraud-related challenges, as well as the most important areas for
improvement that merchants will be prioritizing in their fraud-prevention efforts over the next 12 months.

Top Fraud Attacks Remain The Same Overall, With Friendly Fraud Rising From #4 To #2
Globally, the four most widespread forms of fraud stayed consistent for the third consecutive year of our study. These top four fraudattacks, from most to least prevalent, are phishing / pharming / whaling, first-party misuse (also known as “friendly fraud”), card testingand identity theft (see Figure 19).. Consistent with prior years of our study, merchants were impacted by three different types of fraud, on
average, with SMBs under-indexing around two and large enterprises more apt to grapple with four or more.

Figure 19: Types Of Fraud Experienced By Merchants – Past 3 Year Rankings & Global Incidence (2023)

2021 Rank

2022 Rank

2023 Rank

Global % Experiencing (2023)

Phishing / pharming / whaling

3

1

1

43%

First-Party Misuse (i.e., friendly / chargeback fraud)

1

4

2

34%

Card testing

2

2

3

33%

Identity theft

4

3

4

33%

Coupon / discount / refund abuse

5

7

5

30%

Account takeover

7

5

6

27%

Loyalty fraud

6

6

7

22%

Afﬁliate fraud

8

8

8

22%

Re-shipping

12

11

9

20%

Botnets

10

9

10

19%

Triangulation schemes

9

10

11

17%

Money laundering

11

12

12

15%

AVG. # of attacks experienced

3

3

3

3

Increased Ranking

Decreased Ranking= Sig. Higher vs. 2022

Looking at how incidence of fraud attacks has shifted since our 2022 report, phishing / pharming / whaling attacks showed a significant
increase in global incidence, with 43% of merchants experiencing this type of fraud, up from 35% last year (see Figure 19). The rate offirst-party misuse also ticked upward, affecting just over one-third of merchants globally, which put its incidence just above that of card
testing and identity theft. Occurrences of coupon / discount / refund abuse increased from 25% to 30%, vaulting that type of fraud backup to #5 overall, from #7 last year. And further down the list, the share of merchants impacted by re-shipping schemes also rose by 5%,
from 15% to 20% in this year’s study. This increase ranks re-shipping in the top 10 most common types of fraud for the first time the past
three years.

2023 Global Ecommerce Payments And Fraud Report21

MRC Members Continue To Combat A Larger Number And Variety Of Fraud Attacks
This year’s survey once again highlighted a huge difference between MRC members and non-members, in terms of the number andvariety of fraud attacks experienced by each group. As illustrated by the data in Figure 20, MRC merchants continue to register andreport more than twice as many forms of fraud as non-members – six, on average, compared to three for non-members. In particular,
MRC members are far more likely to experience friendly fraud (91%), card testing (85%), coupon / discount / refund abuse (57%), andaccount takeover (83%). In addition, the majority of MRC members must also grapple with less-common formsof fraud – e.g., botnets and triangulation schemes (57%, respectively).
While this trend of MRC merchants reporting more attacks than non-members has been clear and consistent over the past few years of
our survey, it remains an open question whether this is due to MRC members actually experiencing a larger number and range of attacks
or to MRC members having more fraud detection tools in place, which allows them to identify and register a larger share of the attacks
that impact their businesses (or some combination of the two).

Figure 20: Fraud Attack Incidence Rates By MRC Membership Status (2023)% Non-Members Experiencing% MRC Members Experiencing(N=576)(N=46)

Phishing / pharming / whaling

42%

54%

First-Party Misuse (i.e., friendly / chargeback fraud)

29%

91%

Card testing

29%

85%

Identity theft

31%

50%

Coupon / discount / refund abuse

27%

57%

Account takeover

23%

83%

Loyalty fraud

22%

26%

Afﬁliate fraud

23%

20%

Re-shipping

18%

48%

Botnets

16%

57%

Triangulation schemes

14%

57%

Money laundering

15%

17%

AVG. Number of attacks experienced

36= Sig. Higher for MRC Members= Sig. Lower for MRC Members

In Figure 21, we drill into this data a bit more to display the top five most prevalent forms of fraud faced by merchants in each geographic
region and size segment. Comparing this year’s data to last year’s, the incidence of phishing / pharming / whaling attacks rose spiked
significantly among merchants in Europe and APAC, as well as among mid-market merchants, in general.
There was also a significant year-over-year increase in the incidence of friendly fraud affecting enterprise merchants.
Looking at differences in fraud attacks across merchant segments, Figure 21 shows that APAC merchants are more likely than those inother regions to experience both identity theft and loyalty fraud. On the right side of the graphic, there is also a clear pattern indicatingthat SMBs are significantly less likely to experience most forms of fraud, while the converse is true for enterprise merchants. Thispattern is similar to the one between MRC and non-MRC members highlighted in Figure 20, in that the difference in fraud rates for SMBs
and enterprises may be due to enterprises suffering more attacks, to enterprises having more tools and techniques in place to help themrecognize and register attacks, or to some combination of the two.

2023 Global Ecommerce Payments And Fraud Report22Figure 21: Top Forms Of Fraud Experienced By Region & Size Segment (2023)

Top 5 Attacks By Region
N.America

Europe(n=259)APAC(n=164)LATAM(n=112)Phishing / Pharming / Phishing / Pharming / Phishing / Pharming /Whaling
Whaling
Whaling1

Top 5 Attacks By Size Segment
SMB(n=84)(n=218)

Mid-Market

Enterprise(n=129)(n=275)Phishing / Pharming / Phishing / Pharming / Phishing / Pharming /Whaling
Whaling
Whaling

Card Testing2

Card TestingFirst-Party Misuse

Identity Theft

Coupon / Discount /Refund Abuse

Card Testing

Identity TheftFirst-Party Misuse

3First-Party Misuse

Identity Theft

Loyalty Fraud

Phishing / Pharming /WhalingFirst-Party Misuse

Card Testing

Identity Theft

4

Identity Theft

Coupon / Discount /Refund Abuse

First-Party Misuse

Account Takeover

Coupon / Discount /Refund Abuse

First-Party Misuse

Account Takeover5

Coupon / Discount /Refund Abuse

Card Testing

Card Testing

Identity Theft

Identity Theft

Afﬁliate Fraud

Card Testing

3

2

3

4

Avg. Number fraud attacks experienced
3

3

4= Sig. Higher incidence vs. 2022

= Sig. Lower incidence vs. 2022

Friendly Fraud Still A Pervasive Problem, But Merchants Optimistic About New SolutionsFirst-party misuse, also called “friendly fraud” or chargeback fraud, affects over one-third of merchants, globally, ranking this the #2
most widespread type of fraud tracked by our survey. Merchants estimate that nearly one-fifth of all fraudulent disputes should be
attributed to friendly fraud, and over 6 in 10 have reported an increase in first-party misuse disputes since 2021 (see Figure 22). This
form of fraud is also especially costly to combat, with merchants estimating they have to spend (USD) $35 to manage friendly fraud forevery $100 they face in disputes.

Figure 22: Key Statistics Concerning First-Party Misuse (Friendly Fraud)

34%

18%

…of merchants haveexperienced
first-party misuse(friendly fraud).

…of all fraudulent disputes
should be attributed
to first-party misuse.

…is the estimated cost to
manage friendly fraud(for every $100 in disputes).

report an increase infriendly fraud
disputes since 2021.

More so for MRC Members (26%).

*Trimmed average shown

More so for those in APAC (72%).

62%

Incidence of friendly fraud has
increased among Enterprises (+10%)

To some extent, the regular occurrence and recent increases in friendly fraud attempts lies beyond merchants’ control, as illustrated by
the data in Figure 23, showing the top drivers of friendly fraud disputes (on the left), as well as the top reasons why this type of fraud has
increased over the past few years (on the right). There will always be some proportion of customers who fraudulently attempt to obtainfree goods in this manner, and merchants can do little to tamp down macroeconomic inflation / higher prices and the steady, global
increase in ecommerce sales or demand that they think is spurring the recent rise in first-party misuse.

2023 Global Ecommerce Payments And Fraud Report

23Figure 23: Drivers Of First-Party Misuse And Reasons For Rising Incidence Since 2021

Common Types of First-Party Misuse(Drivers For Submitting Disputes)

Inflation / higher prices

52%

Increase in eCommerce sales / demand

50%

58% MRC Members (86%)

Attempt to obtain free goods or services
Transaction or descriptor
confusion

47%

Family fraud

40%

Transaction amount confusion

40%

Wanting to return goods outsideof your company’s return period

36%

Unwanted subscription / recurring charges(e.g., customer forgot to cancel)

36%

Buyer’s remorse

35%

Quality of goods not as expected

Reasons For Increasing First-Party
Misuse Disputes (since 2021)

27%

N, America (35%)

Europe (19%)

Changes to cardholder protections on
accepted payment cards

41%

Changing / adding new eCommercecustomer bases

39%

Changing / adding new eCommerce
system or payment solution providers

34%

Changing / adding new
eCommerce sales channels

31%

APAC (50%)

APAC (58%)

SMB (11%)= Sig. Higher vs. Other Segments 2023

= Sig. Lower vs. Other Segments 2023

This is not to say, though, that merchants are powerless to prevent or reduce friendly fraud. In fact, they are advancing quickly to
implement a range of key strategies and tactics aimed at thwarting first-party misuse, and most are optimistic that recent changes tocard brands’ compelling evidence rules will help them to further mitigate this pernicious problem.
Merchants’ top strategies and tactics for combating friendly fraud are shown in Figure 24. As indicated by the green arrows in thegraphic, there has been a significant increase in the share of merchants leveraging multiple key tactics and techniques aimed at
mitigating this form of fraud, such as making return and cancellation policies clearer and easier to find, monitoring transaction data forunusual activity, blacklisting customers who file chargebacks and working more closely with payment and fraud providers to identity andprevent friendly fraud attempts.

Figure 24: Strategies And Tactics For Tackling First-Party Misuse (Friendly Fraud)% Using Each Approach To Combat First-Party Misuse(among n=210 experiencing friendly fraud)

Revoking access to services / purchases for customers who ﬁle chargebacks
Making cancellation and return policies clear and easy to ﬁnd on website
Requiring Card Veriﬁcation Values (CVV) codes to process card payments
Monitoring & analyzing transaction data for unusual activity or anomalies
Checking customer purchase and order histories
Filing formal disputes on fraudulent chargebacks with ﬁnancial partners
Blacklist customers who ﬁle chargebacks
Working with providers to prevent or identify fraudulent transactions
Notifying customers when orders are processed / delivered
Verifying billing addresses entered match billing addresses for cards used
Reviewing & analyzing non-fraud chargebacks and declines
Notifying customers after processing their payment
Requiring signature on delivery
Notifying customers before processing their payment
Prioritizing certain types or categories of chargebacks to ﬁght

= Sig. Higher vs. 2022

48%
47%

(+13%)

46%
45%(+18%)

43%
41%
40% (+14%)
40% (+13%)
38% (+12%)37%
36%

Notiﬁcations & Visibility

81%

Flagging & Checking

73%

Veriﬁcation & Identiﬁcation

73%

Enhanced Requirements

59%

Filing & Fighting

53%

32%
30%
30%
27%

= Sig. Lower vs. 2022

2023 Global Ecommerce Payments And Fraud Report24Beyond embracing a broader array of friendly fraud-fighting tactics and techniques, merchants are also making great use of card brands’
compelling evidence rules to combat this issue. Around 9 in 10 currently submit compelling evidence to resolve these types of disputes,
and nearly three-quarters (72%) are already aware of major card brands’ recent updates to compelling evidence rules, which are aimed at
helping merchants tackle this issue more effectively (see Figure 25). Among those in the know, the vast majority – 89% – expect theserecent rule updates to help them solve or reduce the problem of friendly fraud.
Figure 25: Usage Of Compelling Evidence To Mitigate The Problem Of First-Party Misuse

Current Approaches To Using Compelling Evidence

89%
72%

MRC Members (88%)

Expected Impact Of Major Card Brands’
Updates To Compelling Evidence

89%

49%

Europe (58%)

40%
8%Will Help
A Lot
Submit compelling
evidence to respondto ﬁrst-party
misuse disputes.

Collect and store
the necessary data
to take advantageof these updates.

Are aware of majorcard brands’
updates tocompelling
evidence policies.

Will Help
A Little

Won’t ReallyHelp

89% expect these updates will help
them solve or reduce theproblem of ﬁrst-party misuse.

(i.e., 12 months of transaction
data, IP address, device
ﬁngerprint, item info, customer
account, delivery address)= Sig. Higher= Sig. Lower

Making Better Use Of Data & Analytics To Manage Fraud Is Now A Top Priority
In addition to identifying, preventing and mitigating various forms of fraud at the tactical level, merchants must also manage a wide arrayof strategic fraud management challenges and priorities. As the data in Figure 26 illustrate, challenges related to fraud management
have steadily grown for merchants, globally, over the past three years.

Figure 26: Top Challenges In Managing Ecommerce Fraud% Experiencing Each Challenge In The Past 12 Months (2021-2023)

2023

2022

(N=622)

38%
29% 30%34%

33% 31% 32% 31% 32%
30% 30% 30%

30%
28%
26%

2021

(N=677)29%27%

25%

27%(N=650)

23%

24%
19%

22% 23% 22%21% 22% 21%

24%
19%

17%

21%

22%

8% 9% 8%

Effectively
using data
to manage
fraud

Identifying / Keeping up to Challenging Updating fraud
responding to date on rulebusinessrisk models
emerging fraud changes by models quickly
attacks
payment / card because of
networks
COVID-19

Expandinginto newsales
channels= Sig. Higher in 2023

Gaps infraud tool
functionalities

Lack ofsufﬁcientinternal
resources

Lack of internal International
Managing
expertise
expansion omni-channel
fraud

None of theabove= Sig. Lower in 2023

2023 Global Ecommerce Payments And Fraud Report25

As challenges have increased, so too have merchants’ needs to make improvements in a range of strategic solutions and capabilities
related to fraud management. This dynamic is reflected in the data in Figure 27, below, which shows a strikingly similar pattern to thedata in Figure 26. What’s clear and noteworthy at a high level from these two trends over the past three years is that both challenges
and opportunities for improvement related to ecommerce fraud management are steadily increasing from merchants’ point of view.

Figure 27: Top Areas For Improvement In Managing Ecommerce Fraud% Prioritizing Each Improvement Area In The Next 12 Months (2021-2023)

2023

53%

2022

(N=622)

42%

44%

41%

38%

35%

38%
33% 33%

35% 34%30%

33%(N=677)2021(N=650)35%
28%

30% 29% 31%

28% 29% 28%

26% 25%23%

22% 23% 21%

4% 6% 4%

Improving fraud
analytics

Automated
detectionaccuracy

Improving
Streamlining
Capturing & Better managing
Creating
Dealing with
Outsourcing
chargeback
manual review utilizing themobile-speciﬁcincreased
portions of theof omnidispute process tasks & workflow right data
fraud rules
cross-border review / screening
channel fraudtransactions
operation= Sig. Higher in 2023

None ofthese= Sig. Lower in 2023

At a higher level, these data highlight how one particular type of fraud-related challenge has recently become much more salient toa large swath of merchants around the world over the past few years, and that is the usage of data and analytics to more effectively
manage and combat fraud. Ideally, ecommerce merchants and their payments and fraud partners can make use of the insights andanalysis reported in this study, and others like it, to help address this growing need. As the complexities of fraud, global ecommerce,compliance and consumer behavior changes, the use of insights to better understand how effectively they are at managing fraud andincreasing revenue remains more important than ever.
Moreover, this trend reflects a broader theme evident throughout this year’s report of ecommerce merchants needing and trying tobetter leverage technology in their management of both ecommerce payments and ecommerce fraud. In many questions throughout
our survey, we saw significant spikes in the share of merchants making use of more sophisticated technologies, such as automation,
artificial intelligence, machine learning, along with the massive streams of relevant data and analytics that support and feed theseadvanced solutions.

2023 Global Ecommerce Payments And Fraud Report265. Fraud
Prevention
The final section in this year’s report examines how merchants are moving to prevent ecommerce fraud at both the strategic and tacticallevels. First, we examine merchants’ overall fraud management priorities and how those have evolved over time. Then we review which
fraud prevention tools and tactics merchants are using and how effective those are, as well as which additional tools merchants aremost likely to invest in, moving forward.

Reducing Fraud & Chargebacks Remains #1 Priority Guiding Fraud Prevention Strategies
Continuing a trend from last year’s survey, when it comes to the top priority guiding merchants’ fraud management strategies,
they are still most likely to prioritize preventing fraud and chargebacks, versus improving CX (customer experience) or minimizing
costs (see Figure 28). This strategic approach is generally consistent across merchants in different regions and size segments,
although those based in Latin America show a more equal split on this question, with 40% citing CX improvement as their primary
imperative and 39% citing fraud and chargeback reduction.

Figure 28: Top Priority Guiding Fraud Management Strategy – 2021-2023

Most Important Priority For Fraud Management

Reducing fraud andchargebacks

40%

46%

46%

50%

37%

36%

11%

17%

18%

2021

2022

2023

Improving the customer
experience
Minimizing fraud-related
operational costs(N=650)(N=677)= Sig. Higher vs. 2021

(N=622)= Sig. Lower vs. 2021

The fact that this year’s survey showed significant improvement in many important fraud KPIs may be evidence that merchants’sustained focus on fraud and chargeback reduction is starting to bear fruit (see Figure 13). Moving forward, merchants will ideally belooking to continue gaining ground in the fight against fraud while maintaining strong CX and keeping costs in check.

2023 Global Ecommerce Payments And Fraud Report27

Merchants Utilizing An Increasing Array Of Fraud Prevention Tools
Shifting from merchants’ strategic priorities to the tactical tools they rely on to detect and prevent fraud, the survey shows a significant
increase in the average number of tools currently in use, from four last year to five this year. Eight out of the 15 different tools tracked by
the survey registered a significant uptick in usage by merchants, globally, over the past year (see Figure 29).
These include the three most widely used tools (credit card verification services, identity verification services and two-factor phoneauthentication), as well as a handful of tools used by one-quarter to one-third of all merchants (credit history checks, biometricindicators, fraud scoring models, multi-merchant purchase velocity models, and order velocity monitoring). In general, the tools showing
the biggest increases in usage over the past year are also the ones selected by the largest shares of non-users as tools they plan toadopt in the future.

Figure 29: Current & Planned Usage Of Fraud Detection Tools

Current & Future Usage of Fraud Detection Tools
Currently Use

Plan To Use In The Future (among those not currently using)

Credit card veriﬁcation services

55%

Identity validation / veriﬁcation services

50%(+11%)

Two-factor phone authentication

44% (+7%)

10%

3-D Secure authentication

39%

Internal customer order history / website behavior analysis

13%

32% (+7%)

11%

List management

32%

11%

Biometric indicators

27% (+5%)

12%

Fraud scoring model – company speciﬁc

27% (+6%)

10%

Device-based results

31%

7%

Multi-merchant purchase velocity / identity morphing models
Order velocity monitoring
Search engine results
Social networking sites

25%

(+6%)

23% (+5%)
24%
21%

6%
8%

12%

10%

30%

Credit history checks

13%

15%

34%

Geographic indicators and comparisons(+14%)

8%
6%

5

fraud detection tools are
currently used, on average(sig. increase from 4 in2022).

Note: Parentheses indicate significant increases in usage since 2022.

Figure 30, below, shows the top five tools used by merchants in each region and size segment, as well as which tools were implemented
by a significantly larger share of merchants in each segment over the past year. As indicated by the green arrows in each column ofthe graphic, merchants in almost every segment significantly increased their usage of at least one of these top tools, with merchants inNorth America and enterprises reporting increased usage of most of them. The figures at the bottom of Figure 30 highlight how APAC
and LATAM-based merchants, as well as enterprises, use significantly more tools than those inother segments.
The data in Figure 30 once again underscore a bit of recent rebalancing on merchants’ part toward applying “best practice” tools like
two-factor authentication and identity verification, versus more sophisticated tools supported by artificial intelligence or machinelearning algorithms.

2023 Global Ecommerce Payments And Fraud Report28

Figure 30: Top 5 Fraud Detection Tools Used By Region & Size (2023)

Top 5 Tools Used By Region

Top 5 Tools Used By Company Size

N.America

Europe(n=164)(n=112)

APAC

LATAM
(n=84)(n=218)SMB

Mid-Market

Enterprise1

Credit cardveriﬁcation services

Credit cardveriﬁcation services

Credit cardveriﬁcation services

Two-factor
authentication

Credit cardveriﬁcation services

Identity validation/ veriﬁcation

Credit cardveriﬁcation services

2

Identity validation/ veriﬁcation

Identity validation/ veriﬁcation

Identity validation/ veriﬁcation

Customer order
history

Identity validation/ veriﬁcation

Credit cardveriﬁcation services

Identity validation/ veriﬁcation3

Two-factor
authentication

3DS auth. / SafeKey

Two-factor
authentication

Credit cardveriﬁcation services

Two-factor
authentication

Two-factor
authentication

Two-factor
authentication

4

Customer order
historyTwo-factor
authentication

3DS auth. / SafeKey

Identity validation/ veriﬁcation

3DS auth. / SafeKey

Credit history
checks3DS auth. / SafeKey

5

3DS auth. / SafeKey

Credit history
checksBiometric indicators

Credit history
checksCustomer order
history

3DS auth. / SafeKey

Device-based
results

5.5

3.5

4.8

6.2

(n=259)(n=129)(n=275)

Avg. Number of fraud detection tools used
4.7

4.7

5.7

= Sig. Higher in 2023

= Sig. Lower 2023

Consistent with past years of this survey, MRC members continue to use a much larger array of fraud detection and prevention tools
than non-members: nine, on average, versus five among non-members (see Figure 31). This dynamic may be driven in part by the factthat 6 in 10 MRC members currently outsource fraud tools, while only 35% of non-members do the same.

Figure 31: Usage Of Fraud Detection Tools Among MRC Members vs. Non-Members (2023)

Geographic indicators and comparisons

91%

28%

Fraud scoring model – company speciﬁc

85%

23%

Search engine results

83%

19%

Biometric indicators

83%

26%

Internal customer order history / website behavior analysis

76%

31%

Identity validation / veriﬁcation services
List management

74%

27%

Credit card veriﬁcation services

53%

3-D Secure authentication

41%

19%

Multi-merchant purchase velocity / identity morphing models

24%

30%

22%

Two-factor phone authentication
9%

MRC Members
Non-Members

26%
27%

Device-based results= Sig. Higher Usage
Among MRC Members

43%

22%

Social networking sites

74%

57%

38%

Order velocity monitoring

Credit history checks

76%

48%

46%

MRC members use 9 tools
on average, versus 5 tools
for non-members

34%= Sig. Lower Usage
Among MRC Members

2023 Global Ecommerce Payments And Fraud Report29

Most Effective Tools Are Generally Used Most Widely, With A Few Notable Exceptions
As merchants have adopted and implemented more fraud prevention tools in recent years, they have generally been successful
at choosing the ones that are most effective. The data in Figure 32 reflect this good overall correlation between tool usage andeffectiveness. There are a few notable exceptions, however, which might help inform future adoption and investment plans formerchants: fraud scoring models, biometric indicators, and multi-merchant purchase velocity / identity morphing models are all seen as
highly effective but have yet to be widely adopted.

Figure 32: Usage Vs. Effectiveness Of Fraud Detection Tools

95%

Lower Usage,
High Effectiveness

A Credit card veriﬁcation services

90%

Effectiveness (% Rating Very Or Extremely Effective)

Fraud Detection Tools (From most to least used)

Higher Usage &Effectiveness

B Identity validation / veriﬁcation services
K
L

80%

J

C Two-factor phone authentication

D

85%

C

H
E

D 3-D Secure authenticationB

customer order history /E Internal
website behavior analysis

F List managementA

G Credit history checks

F
I
G

75%

H Device-based results
I

N

70%

J Fraud scoring model – company speciﬁc
K Biometric indicators

O

65%

Geographic indicators and comparisonspurchase velocity /L Multi-merchantidentity morphing models

M Search engine results

60%
Lower Usage& Effectiveness

55%
10%

15%

20%

M

Higher Usage,
Low Effectiveness

25%

30%

35%

40%

45%

50%

55%

N Order velocity monitoring
O Social networking sites

60%

Usage (% Currently Using)2023 Global Ecommerce Payments And Fraud Report30Conclusion
The insights and findings captured in this year’s survey paint a vivid and encouraging
picture of how ecommerce merchants are managing payments and fraud, globally. At ahigh level, merchants are clearly making meaningful progress and advancement in theirapproaches to both payments and fraud management.
They are offering customers a wider range of payment methods, such as BNPL and local
digital payments, making increased use of sophisticated technologies to innovate and improve
payment and retail experience (e.g., AI chatbots and connected devices), utilizing multiple
marketplace, processor and acquirer partners to optimize both customer-facing and back-end
payment processes, and tracking an increasing array of payment metrics and KPIs, so they canfurther enhance and optimize their payment strategies, in the future.
When it comes to managing and mitigating ecommerce fraud, merchants’ steady strategic
focus on reducing fraud and chargebacks and their consistent, robust
spending on
fraud management is paying quantifiable dividends in the form of significantly improved
fraud KPIs. They are tackling thorny issues like friendly fraud head-on, collaboratingwith payment partners to quickly introduce new anti-fraud processes and solutions, andinvesting in a steadily expanding arsenal of anti-fraud
tools and technologies.
Fraudsters are always looking for the next opportunity to find a hole in the process, andmerchants will always have more work to do and new problems to face when it comes topreventing fraud. And, with consumer demands ever-changing at a rapid pace, managing
ecommerce payments can also be challenging for merchants. But the data and trends inthis year’s report provide good reason for optimism that they can continue to advance andachieve success in both of these challenging arenas.

2023 Global Ecommerce Payments And Fraud Report31About the authors

Cybersource is a global, modular payment management platform built on secure Visa infrastructure with the benefits and insights ofa vast $427 billion global processing network. This solution helps businesses operate with agility and reach their digital commercegoals by enhancing customer experience, growing revenues and mitigating risk. For acquirer partners, Cybersource provides atechnology platform, payments expertise and support services that help them grow and manage their merchant portfolio to fulfil theirbrand promise.
For more information, please visit: cybersource.com

Merchant Risk Council (MRC) is a non-profit global membership organization connecting eCommerce fraud prevention and payments
professionals through educational programs, online community groups, conferences, and networking events. Encompassing 600+
companies, including 400+ merchants, it provides education on fraud prevention, payments optimization, and risk management. The
MRC was established in 2000 and continues to be at the forefront of industry evolution by focusing its efforts on optimizing payments
and reducing eCommerce fraud through collaboration, networking, education, and advocacy.
For more information, please visit: merchantriskcouncil.org

Verifi, A Visa Solution is a leading provider of next generation post-purchase solutions, that streamline the dispute process and improvethe customer experience. Available for all major card brands, Verifi solutions help merchants globally to prevent and resolve disputes by
sharing compelling evidence, data transparency and merchant-initiated or rules-based refunding. Verifi equips merchants, issuers andacquirers to reduce financial loss, create operational efficiencies, and remove unnecessary fraud and first-party misuse disputes fromthe payment ecosystem.
For more information, please visit: verifi.com

B2B International is a global, full-service market research firm, specializing in researching B2B markets. We help our clients achieve theirbusiness goals by making smarter decisions driven by insights.
B2B International is part of a consortium of world-class B2B agencies who came together to form Merkle B2B. Being a Merkle B2B
company allows us to deliver the world’s first end-to-end, fully-integrated B2B solution. Our one promise? To architect the ultimate B2B
customer experiences.
For more information, please visit: b2binternational.com

2023 Global Ecommerce Payments And Fraud Report32

Appendix 1 – Conversion and Acceptance Rates
By Payment Method
This section displays the average (mean and median) conversion and acceptance rates by payment method, as reported by merchantsin this year’s survey.
Card, direct debit and digital wallet payments have the highest average conversion rates, with means ranging from 25 to 40 percent,globally. Conversion rates are significantly lower for bank / debit transfer and for digital wallet payments in Latin America(see Figure 33).
Figure 33

Average conversion
rates by payment
method(median/mean)

OverallNorth
America

Europe

APAC

LATAM

MidMarket

SMBEnterprise

Cards

30%

38%

35%

43%

35%

40%

25%

33%

25%

31%

34%

39%

30%

36%

30%

38%

Bank transfers / direct debit

20%

30%

25%

33%

30%

37%

20%

28%

20%

19%

20%

29%

25%

33%

20%

29%

Digital wallets / eWallets

20%

26%

20%

27%

20%

30%

28%

29%

15%

18%

20%

26%

20%

25%

20%

27%

Cash on delivery

15%

23%

10%

22%

18%

27%

20%

27%

10%

16%

10%

22%

15%

26%

16%

23%

mCommerce mobile payments

15%

22%

20%

24%

15%

23%

20%

24%

15%

18%

15%

20%

15%

24%

20%

23%

Buy Now Pay Later

15%

20%

15%

20%

15%

22%

10%

19%

10%

15%

12%

16%

10%

21%

15%

21%

Gift cards / vouchers

10%

19%

10%

21%

10%

17%

10%

21%

10%

13%

10%

16%

10%

20%

10%

20%

Cryptocurrency

10%

15%

10%

17%

10%

17%

13%

16%

7%

9%

10%

15%

10%

16%

10%

16%

Other local digital payments

11%

17%

12%

16%

10%

14%

10%

18%

20%

21%

10%

16%

10%

20%

15%

17%

Sig. Lower vs. Other Segments(All means calculated with trimmed averages)

When it comes to payment acceptance, the same three methods – cards, debit transfers, and digital wallets – also show the highest
average rates, with means ranging from 30 to 50 percent (see Figure 34).
Figure 34

Average acceptance
rates by payment
method(median/mean)

OverallNorth
America

Europe

APAC

LATAM

SMB

MidMarket

Enterprise

Cards

50%

55%

75%

62%

60%

58%

40%

46%

40%

46%

50%

56%

50%

53%

50%

56%

Bank transfers / direct debit

35%

47%

40%

50%

50%

55%

25%

42%

21%

34%

40%

48%

40%

51%

30%

44%

Digital wallets / eWallets

30%

44%

30%

46%

38%

50%

30%

41%

20%

32%

30%

44%

30%

47%

30%

42%

Cash on delivery

20%

38%

14%

34%

30%

46%

27%

41%

15%

29%

18%

38%

25%

36%

20%

38%

mCommerce mobile payments

25%

40%

30%

42%

33%

44%

25%

37%

20%

32%

25%

40%

25%

44%

27%

37%

Buy Now Pay Later

20%

36%

25%

35%

30%

42%

20%

32%

15%

29%

20%

34%

25%

38%

20%

35%

Gift cards / vouchers

20%

38%

20%

37%

20%

42%

20%

38%

10%

30%

11%

34%

20%

37%

20%

40%

Cryptocurrency

20%

28%

20%

31%

23%

36%

18%

21%

10%

18%

15%

31%

15%

27%

20%

26%

Other local digital payments

20%

35%

20%

27%

24%

41%

23%

31%

23%

36%

20%

36%

20%

39%

20%

32%

(All means calculated with trimmed averages)
2023 Global Ecommerce Payments And Fraud Report33

Appendix 2 – questions asked
This section shows the questions asked to survey respondents to gather the data shown throughout this report.

Figure 1• In which country are you located?

Figure 2• Please estimate your organization’s annual eCommerce revenue.

Figure 3• Which one of the following describes the primary source of your eCommerce revenue?

Figures 4, 5 & 6• Which of the following types of payment methods does your organization currently accept?
• And which of these payment methods, if any, did your organization add over the past 12 months?

Figure 7• In what ways, if any, does your organization encourage or guide customers to use your preferred types of 		
method(s)?

payment• What is the ONE most important reason why you encourage customers to use your preferred payment method(s)?

Figure 8• Which, if any, of the following third-party marketplaces does your organization currently use to sell to customers?
• Why does your organization utilize third-party marketplaces?

Figure 9• How many payment gateway or processor connections does your organization currently support?
• How many merchant acquiring banks does your organization currently use?
• For what reasons does your organization have multiple acquiring relationships?

Figure 10• Which, if any, of the following retail approaches are used by your organization?
• Which, if any, of the following customer experiences does your organization currently offer?

Figure 11• Which, if any, of the following authorization-related approaches and techniques does your organization currently use?
• Does your organization use any third-party data in association with any of these?

Figure 12• Which of the following payments management key performance indicators (KPIs) are extremely important to 		organization?

yourFigure 13• Please indicate the percent of your annual eCommerce revenue lost due to payment fraud globally, i.e., fraud rate by revenue. This
includes fraud chargebacks received, as well as credits or refunds issued directly to customers who claim not to have placed anorder as well as chargeback fees.
• Please indicate the percent of your annual eCommerce revenue lost due to payment fraud on orders from [INSERT COUNTRY], i.e.,

2023 Global Ecommerce Payments And Fraud Report34

domestic orders. This includes fraud chargebacks received, as well as credits or refunds issued directly to customers who claim
not to have placed an order as well as chargeback fees. Your best estimate is fine.
• Please indicate the percent of accepted annual eCommerce orders that turned out to be fraudulent (i.e., fraud rate by order) from
[INSERT COUNTRY] i.e. domestic orders.
• Please indicate the percent of accepted annual eCommerce orders that turned out to be fraudulent (i.e., fraud rate by order) fromoutside INSERT COUNTRY] i.e. international orders.
• Please indicate the percent of eCommerce orders for which you have received chargebacks due to fraud. Note: A chargeback isdefined as a transaction where the card issuing back disputes a previously authorized transaction.
• Please indicate your order rejection rate for domestic orders.
• Please indicate your order rejection rate for international orders.

Figure 14• Please indicate the percent of your annual eCommerce revenue your organization spends to manage payment fraud — excluding
actual fraud losses.

Figure 15• How do your organization’s future fraud strategy plans incorporate manual review?

Figure 16• Please indicate the percentage of eCommerce orders you manually screen for fraud.
• Of the eCommerce orders manually reviewed by your organization, please indicate the percentage you decline (cancel) due tosuspicion of fraud.

Figure 17• To what extent has your organization implemented changes necessary to comply with PSD2, in particular, strong customer
authentication (SCA)?

Figure 18• And how do you expect PSD2, in particular, strong customer authentication (SCA), to impact your organization?
• With respect to SCA, how many of the following exemptions or out-of-scope flags are you planning on utilizing in the future?

Figure 19, 20 & 21
• Which of the following types of fraud attacks, if any, have you ever experienced at your organization?

Figure 22• Which of the following types of fraud attacks, if any, have you ever experienced at your organization?
• Has your organization experienced an increase in first-party misuse / friendly fraud disputes since 2021?
• Approximately how much does it cost your organization to manage first-party misuse / friendly fraud disputes (for every $100 in
disputes)?
• What percentage of (all) fraudulent disputes do you believe are first-party misuse (i.e., friendly fraud or chargeback fraud)?

Figure 23• For what reasons do you believe your organization has seen an increase in first-party misuse / friendly fraud disputes
2021?

since

• Which of the following reasons do you believe causes first-party misuse (i.e., friendly fraud or chargeback fraud) to occur at yourcompany?

Figure 24• Which of these describe your organization’s current approach to combating First-Party Misuse (i.e., friendly fraud / chargeback
fraud)?

Figure 252023 Global Ecommerce Payments And Fraud Report35• Do you submit compelling evidence to respond to first-party misuse / friendly fraud disputes?
• Have you heard of major card brands’ updates to compelling evidence (related to first-party misuse / friendly fraud disputes)?
• Do you believe these updates will help solve or reduce the problem of first-party misuse / friendly fraud?
• Do you collect and store the necessary data elements on historical transactions to take advantage of these updates?

Figure 26• Which of the following challenges related to eCommerce fraud management, if any, has your organization experienced in
the last 12 months?

Figure 27• Thinking ahead to the next 12 months, which of the following, if any, are areas of improvement for your organization?

Figure 28• Which one of the following would you say is the most important to your organization when evaluating fraud management
practices?

Figure 29• Next is a series of fraud detection tools. Please indicate which tools your organization currently uses.
• Which tools, if any, does your organization have plans to start using in the future?

Figure 30 & 31
• Next is a series of fraud detection tools. Please indicate which tools your organization currently uses.

Figure 32• Next is a series of fraud detection tools. Please indicate which tools your organization currently uses.
• Now, how effective is each of the following tools in detecting eCommerce payment fraud?

Figure 33• What is your organization’s average conversion rate (i.e., percentage of visits from the checkout page that result in a completed
checkout) for each of the following payment methods that you currently accept?

Figure 34• Please estimate your organization’s acceptance rate (meaning the percentage of initiated payments accepted by the payment
provider) for each of the following types of payment methods.
														2023 Global Ecommerce Payments And Fraud Report36